Breaking the poverty trap

from The Times of India

LUCKNOW: How and why do some individuals move out of poverty, while others remain trapped? Do social identity (caste) matter in mobility patterns ? questions a World Bank study, ‘Moving out of poverty (MOP)’. A workshop was held on MOP at Giri Institute of Development Studies on Wednesday.

Initiatives to improve crop productivity constituted the top reason cited by movers out of poverty. New work opportunities through jobs and better wages was the second most important trigger for upward mobility, establishing a new business or improving it was third, said Deepa Narayan, senior advisor, World Bank. She is currently director, leading a 17 country study ‘Moving out of poverty: Understanding freedom, democracy and growth from bottom up.’

The study found that poor people from Schedule Castes (SC) are less likely to move out of chronic poverty. Nearly 38% of SC remained in poverty while OBCs in contrast, are mostly classified as movers reflecting progress. While the study said that a majority of Muslim households escaped poverty as they have a family member who has migrated to foreign shores as Middle East, said Deepa.

It was found that 90% of movers across caste categories say that they were very optimistic about their children’s future 10 years from now, compared to about 60% of the chronic poor. This means that success reinforces aspirations, she said. The individual aspirations level of the chronic poor and the SCs among them are lower than those of the movers. Our hypothesis is that the poor across caste categories do not lack aspiration to do well and adopt strategies to do better but its due to discriminatory local level structures or the jobs and asset that they are stuck which hinder their ability to escape poverty, Deepa added.

Local panchayats can play a crucial role at local levels, said Pradeep Bhargava of GB Pant Social Science Institute, Ahemadabad. But the question is will responsiveness, accountability mechanism through fair access to information, free and fair election help at grass root levels? Giving of assets like land and focusing on their education would help the SCs, said Deepa.

There exists a vicious cycle between development and governance, said Binayak Sen, senior economist at Poverty Reduction and Economic Management unit of South Asia region of World Bank in Washington. Low skills, non-productive human capital are issues that need to be tackled in UP.

Economic prosperity has a positive role in moving people out of poverty. So does location matters as communities close to market (within 12 kms) have a roughly 2% higher MOP than those away. A responsive local democracy leads to 4.5% increase in community MOP. School matter increases MOP by 2.3%, land reforms have a positive association with community’s MOP, said AK Singh, director, Giri Institute of Development Studies.

There are certain areas that have not been represented in the WB study, North-West UP which is the richest part and the eastern tarai which is the poorest belt of UP is missing from the study. Inspite of social welfare programmes of government the net movers out of poverty is just 5%, which is inadequate to meet challenges of poverty. Is there a correlation between infrastructure, quality of local leadership? questioned AK Singh.

In 2005, the World Bank conducted this study across 110 rural villages in UP to explore the dynamics of 10-15 years transitions out of poverty in the state. The objective was learn retrospectively from those who moved out and stayed out of poverty, vis-a-vis others who could not.